2006 (5) TMI 267 - AT - Central Excise

Summary

Issues:
- Valuation of goods for duty payment
- Applicability of Supreme Court rulings
- Time limitation for demanding differential duty
- Relationship between the assessee and sister concern
- Financial hardship plea

Valuation of goods for duty payment:
During the material period, the appellants were manufacturing Steel Bars and Rods on a job work basis. Initially, they valued the goods based on higher prices from their sister concern, which changed post-April 1997. The department objected to the new valuation method based on raw material cost and job charges. A show cause notice was issued in 2001 demanding differential duty. The original and appellate authorities upheld the demand and imposed a penalty.

Applicability of Supreme Court rulings:
The appellant's counsel did not contest the duty demand on merits, citing the Supreme Court's judgment in a related case. The counsel argued for a time-bar defense, claiming a bona fide belief in the applicability of a different Supreme Court ruling. However, the Tribunal rejected this plea, stating that the relevant Supreme Court decisions were known to the assessee during the dispute period.

Time limitation for demanding differential duty:
The Tribunal found that the plea of limitation based on a bona fide belief was not valid as the relevant Supreme Court decisions were known to the assessee. The department had a case of suppression against the assessee, and the plea of limitation could not benefit them. Despite this, the Tribunal considered the appellant's financial hardship, noting that the company had been declared sick by BIFR.

Relationship between the assessee and sister concern:
The relationship between the assessee and their sister concern, along with the higher depot prices, was not disclosed to the department until requisitioned. The department argued suppression of information, which weakened the assessee's plea for limitation. The Tribunal considered this relationship and the delayed disclosure of depot invoices as factors against the assessee.

Financial hardship plea:
Considering the financial hardship of the appellant, the Tribunal directed them to pre-deposit a specified amount within a given timeframe. The Tribunal acknowledged the company's poor financial condition, as evidenced by the BIFR's declaration of the company as sick. Compliance was to be reported on a specified date.